TCS Daily

Dr. Mahathir, Jews and Asian Terror

By Alan Oxley - November 14, 2003 12:00 AM

Dr. Mahathir Mohamed has just stepped down after 22 years as Prime Minister of Malaysia. He was one of Asia's longest rulers and most controversial rulers. His last public speech had one of his trademarks -- an attack on the Jews -- with the old, anti-semitic canard that they rule the world. Under his leadership Malaysia prospered as one of the fastest growing developing countries in the world. However, he also left a legacy that will have to be dismantled if Malaysia is to resume growth to lift living standards.


Dr. Mahathir saw himself as a man of the future. He governed during Malaysia's transformation from an agricultural economy and rural society to the one of the world's largest manufacturers of consumer goods. His target was that Malaysia should secure industrialized world standards of living by 2020. He invested in IT infrastructure for the future. But from an historical perspective, he was a man of the past.


He set himself up as a Third World, populist, radical a decade or two after radical chique faded out of fashion in global politics. It died with the generation of nationalist leaders for whom it was their political cache -- Suharto in Indonesia, Nkrume in Ghana and Nasser in Egypt. Castro is now regarded as an anachronism.


But it was Dr. Mahathir's political cache, Malaysian style, or more properly Malay style. Malaysia is a multiracial country. Just over half of the population are Malays. Around one quarter is Chinese and 20 percent are Indian and other peoples from East Malaysia. As is common in multicultural societies, the interaction of the cultures creates a heady and dynamic brew. Combined with Malaysia's natural resources and the governmental infrastructure created by the British, Malaysia had the ingredients for success.


When he began his political career, the Malays were the largest and poorest population group in Malaya. Chinese dominated business and government. He had racial beliefs. He wrote a political tract early in his career called "The Malay Dilemma." It is based on the principles of scientism which was a prominent belief in the West before World War II. He warned Malays that if they continued to inbreed, they would reduce their gene pool. His own heritage was Indian and Malay.


Dr. Mahathir seized the leadership of Malaysia with a platform of Malay nationalism based on racial preference for Malays, but guaranteeing Chinese groups protection if they went along. Racial riots in Malaysia in the late sixties had seen Malays killing Chinese. His Malay nationalism designated Malays as "sons of the earth," gave them preference for government jobs, places at university and shares in private companies. State owned businesses (broadcasting, transport, utilities) were privatised, many by allocation to Malay business figures.


All Malays are Muslims, in fact and legally under the Constitution. Dr. Mahathir was a populist politician, skilled at playing the race card. He did not criticise Chinese inside Malaysia (to protect their interests Chinese businesses largely allied with him), but neighbouring Singapore (80 percent Chinese) was a regular target, as was Britain (the former white colonial rulers) Australia (the nearest and most prominent white, Western nation) and the United States, the leader of the West.


Mahathir's principal political threat was from within the Malay community, in particular orthodox Islamic groups who drew support from rural communities which were struggling with the impact of social change from rapid modernization. The wealth and corruption among wealthy urban Malays is resented in rural areas. His regular attacks on the West, Israel and Jews, using familiar radical Islamic themes, was part of the political strategy to appeal them, while opposing key ideas of Islamic fundamentalists -- such as an Islamic State or implementing Islamic law. He was the first regional leader to detain local representatives of Jemaah Islamiah, the Southeast Asian affiliate of Al Qaeda, once they were identified.


He believed in private ownership, but not free markets. His government lost billions trying to capture the world tin market and from freewheeling trading by the central bank. He took control of Malaysia's legal system. He emulated the "Asian way" touted by Japan in more ways than one. Malaysian political analysts describe the operation of the leading Malay party which he headed as based on the "money-politics" model of Japan's Liberal Democratic Party. Under him, corruption certainly increased in Malaysia and his successor, Abdullah Badawi, has described it as one of Malaysia's greatest challenges.


Tackling corruption is vital to Malaysia's future. Malaysia grew rapidly in the eighties and nineties in spite of corruption. Malaysia's economy faltered after the Asian currency crisis and has still not fully recovered. Dr Mahathir averted the collapses in Thailand and Indonesia, but by altering the exchange rate and restricting trading on the stock market, he lost the confidence of foreign investors, already wary about the cost of corruption. He restored reasonable growth after the crisis, but principally through public spending.


Malaysia needs to restore growth and to spread wealth to rural Malays. If it does not, breeding grounds for radical Islamic groups will be created and racial tension could arise. To lay the basis for a new era of growth and to foster foreign investment, the money politics machine must be dismantled, the independence of the legal system restored and the government has to stop interfering in investment decisions. This is a tough reform agenda.


Abdullah Badawi may have to employ some of Dr. Mahathir's populist strategies to make the necessary reforms. His neighbours and Western trading partners should be patient. It is very important that one of the few representative governments with a significant Muslim population is supported. It is not merely for the global importance of demonstrating that representative government and Islam can work but also for maintaining stability in Southeast Asia.


Alan Oxley is Chairman of the Australian APEC Centre at Monash University, Melbourne.


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